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Question set 12 (15 points) Answer the four questions a through d using the following information Scenario Severe recession Mild recession Normal growth Boom Probability
Question set 12 (15 points) Answer the four questions a through d using the following information Scenario Severe recession Mild recession Normal growth Boom Probability 2 3 3 2 Rate of return Stock fund Bond fund -17% -3% -10% 5% 2594 19 33% a Calculate the expected return for both the stock fund and bond fund (4 points). I b. Calculate the standard deviation of returns for both the stock fund and bond fund (4 points) here to search c. What are the covariance and correlation coefficient? (4 points) I d. What is the weight of the bond fund at the minimum-varjance portfolio? (3 points)
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